London, July 31 - British bakery chain Greggs Plc is well placed to deal with the challenging business climate ahead, it said on Thursday as it posted a 5.1 percent increase in first-half like-for-like sales.
However, pretax profit was down 4.3 percent to 14.1 million pounds ($27.9 million) after the company bought back shares at a cost of 6.7 million pounds during the period.
Greggs, which sells sandwiches and other snacks, said overall first-half sales in the 24 weeks to June 14 rose 7.7 percent to 276 million pounds.
Sales progress slowed during March and April as a result of poor weather and poor Easter trading but has improved since May, said Greggs, with like-for-like sales during the first six weeks of the second half up 5.8 percent.
Greggs said it benefitted from trading in a wide variety of locations including town centres, out-of-town retail parks and in a growing number of non-traditional areas such as industrial estates.
"This (spread of trading locations) helped us to maintain the like-for-like number of customer visits to our shops during the first half, despite the more demanding trading environment," the company said in a statement.
Greggs opened 26 new shops during the period and closed 12, giving it a total of 1,382 outlets at the end of the first half.
Despite the rising cost of ingredients such as flour and the challenging consumer environment Greggs is confident about its second-half prospects.
Managing Director Sir Michael Darrington said the company's "value for money" products and trading location spread "reduces our exposure to a sustained downturn in consumer spending".
Greggs increased the interim dividend by 6.5 percent to 49 pence per share.